Ram took a home loan of Rs. 45,00,000 at the rate of 6% per annum for 25 years. His EMI by using flat rate method is
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Rs. 37,500
In the flat rate method, simple interest is charged on the whole loan for the whole period, and the total is divided equally among the monthly instalments.
\( \text{Interest}=4500000\times 6\%\times 25=6750000 \)
\( \text{Total amount}=4500000+6750000=11250000 \)
\( \text{Number of instalments}=25\times 12=300 \)
\( \displaystyle \text{EMI}=\frac{11250000}{300} \)
\( =37500 \)
So the EMI is Rs. 37,500.
CBSE Applied Mathematics (Class XII):
Methods of Calculation of EMI or Instalment
